5 Common Misconceptions About ERP Solutions
Here are some common misconceptions about ERP solutions that aren't true.
Since its introduction in the 1990s, enterprise resource planning (ERP) software has become a necessary management tool for businesses of all sizes and industries. It is a solution used by organizations to consolidate and streamline day-to-day business operations, such as project management, accounting, procurement, risk management and compliance, supply chain processes, and more. According to certain studies, the top three business objectives cited for ERP implementation are achieving better performance metrics (46%), cost savings (46%), and increased efficiencies in business transactions (40%). However, some common misconceptions about ERP software often come up during consulting sessions. If you are going through the ERP selection or evaluation process for your business, this post will help clear up any misconceptions.
5 Common Misconceptions About ERP Solutions
An enterprise resource planning (ERP) software solution helps businesses streamline their operations and improve productivity. However, many companies have yet to experience its advantages, sometimes due to a lack of understanding or misconceptions about ERP software. Here, we demystify some of the common misunderstandings associated with ERP solutions to help you determine if it is right for your business.
🔎 ERP Software Is Only Required for Large Companies
ERP solutions are designed to integrate an organization's entire operations under one single platform. This unification helps streamline business processes and information across all departments, allowing them to make better data-driven business decisions. However, some believe that only large companies with complex processes need this dedicated software.
That is no longer the case. Smaller businesses that have outgrown their entry-level accounting system will significantly benefit from an ERP solution. There are many modern ERP solutions specifically designed to meet the needs of a small or mid-sized business. For instance, Microsoft Dynamics 365 Business Central is an affordable, adaptable cloud ERP solution specifically for small and medium companies that grows with your company.
🔎 ERP Solutions Are Unaffordable For Small Businesses
Another common misconception is that ERP software is unaffordable for small and mid-sized businesses. Due to this perception, many SMB companies stick it out on their outdated system or tend to postpone choosing a solution - which could negatively impact your bottom line due to inefficiencies.
While an ERP project is undoubtedly an investment, cloud ERP solutions allow small and mid-sized businesses to leverage all the benefits of a modern ERP system at a significantly lower cost of ownership than their on-premises counterpart. Hosted in the cloud, their pricing is often based on a monthly or yearly subscription model. You also do not have the upfront costs of purchasing infrastructure or ongoing costs such as maintenance fees.
🔎 The Majority of ERP Implementations Fail or Go Over Budget
Another misconception about ERP software is that the implementation will likely fail or go over budget. This concern is understandable because many horror stories exist about failed ERP implementations with massive cost overruns. However, it is a misconception to believe that all ERP implementations are destined to fail or go over budget.
The best way to ensure that your ERP implementation is successful is by selecting the right ERP partner, who is transparent, shares your business and personal values, understands your business challenges, and has significant experience in your industry. At Kwixand Solutions, our 2 phase ERP implementation methodology is designed to mitigate the risks of ERP implementation, such as going over budget and over-schedule.
🔎 ERP Implementation Can Be Handled Internally
Companies with robust IT staff believe they can easily implement an ERP solution internally to save costs. This is often a misconception - even if some members of your IT team have the required expertise, focusing on implementation will take time away from their routine tasks and interrupt the functioning of other critical systems. Working with a technology partner experienced in ERP solution implementation is the right approach. Looking for an ERP implementation partner? Here are 7 criticial questions to ask your potential ERP partner.
🔎 ERP Software Upgrades Aren't Necessary
Another common misconception is that your on-premises ERP software should be upgraded after 10 to 15 years. Older ERP systems were typically updated in this amount of time, but nowadays, not upgrading your on-premises solution on time means you could be missing out on much-needed functionality and security updates. Here are other critical reasons why you should upgrade your ERP software on time.
Upgrades can now be done in as little as a few weeks, and the emphasis on continual development means it adapts to your requirements. If you choose cloud-based ERP solutions, you can also benefit from automatic software updates and remote working for users.
If you look at the common enterprise resource planning software misconceptions discussed in this blog, it is clear how most firms might be missing out on a real opportunity for advancement. And if you still think that the ERP system is just for large enterprises, it's time to reevaluate.Now that modern ERP software is cloud-based, scalable, and adaptable, any company with a growth mindset can head to a new way of running its business.
Considering an ERP project? Kwixand Solutions Can Help
If you're looking for an ERP partner who can guide your ERP project and help you meet your objectives without going over budget or timeline, we're here to help. We are a Microsoft Dynamics 365 Partner based in Vancouver, Canada, and we help businesses across the US and Canada digitally transform and thrive. We offer 2 different types of ERP implementation methodology to help businesses mitigate the risks of going overbudget or over schedule - Kwixstart implementations for small and midsized companies and our 2 phase ERP implementation methodology. Book a free consultation to learn more or if you have any questions.